14 Apr 2011

Taib’s Ten Income Streams

How did he get the money?

Recently we spoke to one of Taib’s key business partners in strict confidence. He explained to us what he described as the 10 main income streams that have turned the Chief Minister into a multi-billionaire over the past 30 years. In the process he gave us a fascinating insight into the business practices of Abdul Taib Mahmud.

They all involve the abuse of power, corruption and the exploitation of the people and environment of Sarawak. Our interviewee, who has done years of business with the Mahmud family, told us he believes that Taib is probably the richest man in South East Asia, having cashed in the Sarawak Rainforest.

Income Stream 1

He got nothing of course!

Timber Licences– The Ministry of Forests issues timber licences for 5, 10, 15 years. It is the Chief Minister who decides the price and he demands money to issue them.

Cronies who deal with the Chief Minister are instructed to pay their bribes and kickbacks into foreign bank accounts outside of Sarawak, often in Hong Kong or Singapore in the early days.

The informant told us that, because the timber companies declare so little profit, very little tax is paid and hardly any of the money made from felling the trees came back into Sarawak.

Income Stream 2

Taib has admitted he started daughter Jamilah up in business. CAN$4.5 million was invested in the first year into Sakto alone.

Tonnage- On top of this, our informant told us, he charges the timber company a kickback of RM100 per ton of wood they log. This alone is worth RM2 billion a year, since for the last 30 years around 20 million tons have been felled each year.

Income Stream 3

Extending Timber Licences – Companies wanting to be listed on the Stock Exchange have a requirement that the expiry date for their assigned areas has to be at least 15 years, meaning they have to extend their licences.

They go to the CM who says “Ok can you see my brother Onn” [in the earlier period Onn managed Taib’s businesses in Sarawak and abroad].

Sakto in Canada is worth hundreds of millions of dollars

Because the requirement by the KL Stock Exchange was 30% Bumi Shareholders the timber tycoon would invite a Taib family member of Taib’s choice to take these 30% of the shares for free!

But these family members are usually nominees – they sign a blank share transfer form and a blank director resignation form, which Taib takes and keeps in his safe or in the foreign bank’s safe deposit box. In this way Taib can make them resign whenever he likes and keeps ultimate ownership of the shares!

Income Stream 4

Lucrative monopoly over shipping licences meant Taibs could squeeze the Japanese shipping firms.

Achipelago Shipping- Using their control over the monopoly over timber export licences, handled by Onn Mahmud’s company Achipeligo, the Mahmuds charged US$ 4.00 per cubic metre in kickbacks from the Japanese shipping companies.

Since 16 million cubic meters were exported most years, this was worth US$64 million a year (RM200,000,000).

Another insider has explained to us the system. The logs would be weighed going onto the ships and every ship’s tally would be recorded and sent to Onn Mahmud’s office manager in Hong Kong, who was Mr Shea Kin Kwok.

The Japanese shipping companies would pay the money into one of around six companies in Hong Kong. In 2007 the Japanese tax authorities fined a number of companies for undeclared tax on some of these payments to the Taibs.

Income Stream 5

Grandiose - one of Saktos sister companies, Ridgeford, has a string of properties in London

Achipelago Shipping (2)- Agency fees from the shipping company. Achipelago had the monopoly of all documentation for shipping. One shipment would have to pay US$2,000 in agency fees plus other charges.

It would amount to US$10,000 (RM30,000) per ship per visit. All this of course just added to the cost to the buyers in Japan.

Onn Mahmud was only a nominee in this enterprise, we are told. Taib would give him 10%. The insiders say that Achipeligo Shipping was the major ‘cash-cow’ for the Taibs. Onn had not wanted to take on the job of managing it at first, as he did not understand the potential, but in the end and it made the family billions in black money.

Income Stream 6

Development? What development?

Privatisation of Government Companies- Taib corporatizes and then privatises state assets, selling them off to public listed companies, which are in fact majority-owned by the Taib family and nominees. Sarawak’s largest company CMS was formed in this way, it is mainly owned by Taib’s family and the Chief Managers are his son Abu Bekir and son-in-law Alwee Alsree.

According to our insider, the method is to pretend the state asset is losing money and decide to sell it. Before privatisation money is poured into up-grading the facilities and then it is corporatized. Then finally, it is ‘privatised’. He will make an offer from eg CMS to buy it and the negotiations all go on behind closed doors, where he represents the State of Sarawak as Finance Minister.

Taib makes a big play at the closing stages of the negotiations, when there is a meeting to make the final decision. He excuses himself on the grounds that he has an interest and leaves the meeting to be chaired by Jabu or George Chan, who waves it through.

Income Stream 7

logging or plain theft?

Illegal Logging in Indonesia- Hardwood Timber Sdn Bhd licences wood which has been illegally logged and brought over the border, according to the business associate.

“They levy handling fees in the border area. They charge RM17 per ton. There are many, many little companies doing this. A lot of jobless gangsters”.

It legitimises the theft from the Indonesians. Indonesia has complained in the past, but it is still going on.

Income Stream 8

Federal payments for infrastructure or just graft?

Federal Government Contracts- Nearly all the Federal Government projects in Sarawak are done by the Taib family companies. Roads, schools, hospitals – nearly all the projects that the Prime Minister is going around promising now as he tries to buy the election, will end up profiting the Taib family more than anyone else!

This is because the CM has the sole authority to endorse an application to pre-qualify to tender. In order to get a permit to tender for a project you need a supporting letter from the CM and generally only his family companies get them!

Adelaide Hilton is another Taib foreign property

Hardly anyone else gets a chance, says our business insider. Some Iban companies do get projects, because the Federal Government does not want to be seen to be giving them all to Taib, but he gets 70-80% of them!

Once the Taib company has received the Federal Contract it then sub-contracts the work for a nice profit and lets someone else do the work with a much smaller budget. This means there is a likelihood that it will be sub-standard and everyone else is squeezed.

Income Stream 9The Alienation of State Land to Oil Palm Plantations – Our business leader informant tells us that Taib charges at least RM 1,000-1,500 per acre in kickbacks.

This amounts to at least RM20,000,000 for a 10,000 hectare plantation His chosen negotiator will explain this to the purchaser. The licensee has to pay the money outside of Sarawak into an off-shore account.

YB Ali Mahmud is just one of the family members to have done well out of land grabs.

Leaked records from the Land and Survey Department to Sarawak Report shows that around 1.4 million hectares has been handed out by land and survey for plantations. So if our informant is right this amounts to a very nice sum of money for Taib 1,500 X 1,400,000 is RM 2,100,000,000 or RM2.1 billion.

How it works is the person who wants land writes to the Land and Survey Department run by Taib. You pay the official premium to the Government, which is for example RM300-350 per acre, but on top of that it is the secret RM1,500 that you have to pay to Taib.

Now the prices are rocketing, Taib likes to complain to his business cronies that he regrets having sold so much off so quickly in the early years!

Income Stream 10

Borneo Convention Centre and just about any other State Contract you care to mention goes to Taib companies.

State Contracts- Taib has full control over these and at least 70% goes to his own family companies, bringing in hundreds of millions annually.

Recent eye-catching state projects that went to the Taibs have been the new DUN Parliament Building and the Borneo Convention Centre

Our contact says this is by no means a complete list of the money-making opportunities the Chief Minister has enjoyed in Sarawak, but it goes some way to explain the enormous wealth visibly enjoyed by himself and by his family. One other obvious way in which the Mahmuds have made even more money is their urban landgrabs. The areas taken by Raziah in Miri, Batu Lintang and Bintulu Airport, taken by Naim Cenderas are just some which have been covered by Sarawak Report.

Plenty of questions to answer - staged interviews are not enough.

Once this wealth has been taken abroad and invested in property and other ventures there has been a whole new opportunity to multiply the wealth several times over.

Taib is known to have done very well investing in rocketing property markets in the US, Canada, UK and Australia. However, he is also believed to have lost money in poor investments such as the Icelandic banks!

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what's our suggestion to push highway in swk to be upgraded immediately!!! Its already more than 10 years I seen no drasctic changes in swk roads links especially btu-sibu road. JKR has done nothing…minister incharge of infrastructure also not done anything!!! so how? no point we have the infrastructure ministry & department such as JKR! JKR & ministry concerned must be abolished. No allocation, waiting approval from !!!! Najib has approved special allocation 2B for swk sabah to improved the road network. Mana dia jalan belum buat? kita sudah naik fed up…JKR has done nothing..makan gaji buta saja…

pity the bumiputras of sarawak. in the just concluded state election, there were poster going around in melanau/malay majority area that if PR wins, there will be a Christian chief minister. which just goes to show you the mentality of these people. never mind the person is a thieving crook, as long as he is a muslim.

Thank you to Sarawak Report for your daring and eye-opening exposure on the Thief Minister of Sarawak. Keep exposing the culprit. He might have won the state election through crooked and devious means, but your relentless exposures of his evil ways will surely bring him crumbling down.

Kati kitai tu paloi

A chief minister has turned into thief minister. When power stay for far too long, man becomes untouchable, corrupt and greed set in. This has been Taib's politic of development and transformation but all end up to his own coffer. I believed all his ministers knew what is happening surrounding them but they do not bother or dare not go against his evil doings. God must be watching them all. People are waiting to see how people like Taib will end up his political career.

http://www.maa.com.my Dominie

Thanks for sharing the truth, the truth will prevail. My heart yearns for justice and divine intervention!!

YB Baru

lets not harp on the mentality of the moslem voters..they voted whom they choose..its democracry bro!! blame the PKR failed strategy for blaring out the Baru is the new CM even before the PKR won the election and formed the govt !! in all mudfight, you throw mud and mud get thrown at you ..simple as that!!

sarawakian

maybe muslims in malaysia are afraid if a christian become a chief minister because they think they might be supressed later on in term of religion. but if you see christian countries they allow muslims to freely practice their religion. on the contrary in many muslim countries including malaysia freedom of religion of the same is unexistent. our country boasts freedom of religion but then they block the malays from getting out of islam. other religion cannot be preached to the malays. is this freedom? they afraid the christians in sarawak will do the same to them. but the christians will not do that. then why are they fearfull. i suppose it is just the mentality that they will not want to allow non muslim to be their leader no matter how just one may be. this is used by politicians in malaysia to gain power. like taib they become muslim because they know the muslims will vote for them. this is politics in the shed of religion. those people want power, money. that is religion by supress. in sabah i heard people are given money to become muslims. in many places in sarawak if a village is a muslim vilalge, the facility is very good where the surrounding vilages are poor. this is again supress of religion. this scenario in malaysia is very obvious it has been the talking i hear since i was a kid. its sickening. but people of sarawak are just blind. fuh….. i have alot to say but thats all for now…

After all these exposure of Taib's blatant abuse of power and corruption, what's the next course of action to retrieve Sarawak's wealth from this excessively greedy devil of a cm? The BN is not with us, so are the natives who voted for them. We need to change the GOVT or else third party has to intervene for us. Thanks so much to SR to a great job! God bless you!

From there, investigate until Taib is to put into jail and get all those billion dollar property be sold and bring the money back to Sarawak to build road, distribute income to residents like Singapore and like Penang and Selangor did recently.

http://snoopyjnr.com snoopy jnr

Hope he, his family and cronies rot in hell. This is beyond disgusting.

http://snoopyjnr.com snoopy jnr

Islam allows its followers to overthrow corrupt leaders by any means necessary, if he refuses to step down, return the stolen loot and repent.

GO GO >> GO

That is not all!!! There are many more to those mentioned above. Free extension of his palace by TPK, kic back from all projects given to TPK etc.

I guess it is wrong to say he is probably the richest man in South East Asia, he could be on the top 3 world richest man.

I don't believe it why the Sarawakian still choose him for so long. It is time to change!

brrr

dear all,

I think I am the most commentator here. No one can argued me. Tell me anyone can challenge me all the facts here! No point we discussing to investigate la, to step down taib la, what for? we dont care of that!! Let taib & his family kaya! we want more development especially infrastructure!!!! Swk are far behind compare with Sabah roads. U can check in internet if u dont believed!!! Sabah distant road links more than swk!!!! How? JKR Btu-Sibu dont nothing!!! PR shadow cabinet should proactive monitored this!!!! Dont talk only take action (NATO) NO ACTION TALK ONLY….haiyaaaa..pantau,….pantau…if not your seat sub be given to person can WORK & THINK FOR RAKYAT

Honbilover

Shut up everyone….stop taib this,taib that…who at d first place electing BN? Stupid only now complain…well election process is not effective enuf to remove him then why not do A HUGE DEMONSTRATION just like wat hapen in Egypt n Libya..otherwise there wil be no changes takes plc cos our dayak leaders in BN also damn stupid n greedy…"YES MAN" attitude,…

YS Limban

Yes Honbiover, i m fully agree with you, quite many of us have been expressing our angry feelings and views, complains.

Who, where, when ? The big Gun if there is will listern/hear to us. Time is moving and the Clock is turning. The only, and only option solution left is – Demonstrations.If not, very very soon we are going to be like Arab Palisten.

brrr

I totally not agreed with Honbilover n YS Limban proposal for HUGE DEMO!! we cannot follow what ever situation outside swk n compare with swk atmosphere!!! you must know that your statement will be monitored & recorded accdgly by MCMC & govnt!!!! I believed you not aware how it done n works. If you are IT well verse you will know!!! I am not no longer BN supporter as previously I am BN strong supporter…what thing that i have change my mind is BN nothing none for swk especially road infrastructure. If you never driving long distance from miri-kg-miri do not talk…just keep quiet!!!! I am regular user for this route for more than 10 years!!! nothing improvement on road quality especially btu-sibu route!!! I believed last 10 years you are still kids!!! do not try KALAU KAIL PANJANG SEJENGKAL JANGAN MENDUGA LAUTAN YANG DALAM….

YS Limban

bnr," kalau kail panjang sejengkal jangan menduga lautan yang dalam," How do you know that we never driving long distance from miri-kg miri or kg-miri-kg, for your last 10 years you should use a better vechile, that how to solve your problems.

At the same time you says, do not talk …. just keep quiet!!!

To me you are a coward, you're getting scare of your own shadow,because you are a strong BN supporter.

Again in your blog, you says nothing was done to the road,no improvement in the last 10 years. Then you say pantau..pantau.. pantau…. to me it looks like that you are seeking for jobs in your blog. you are too old,..nyanyok lah! you does no know what happening at your backyard. If you does agree about anything, not necessary to tell other to be shut up, because you are not aware MOCs is organizing for that plan by August 13.

brrr

hey YS Limban you are totally not understand/understood what I meant…do not imagine in narrow what we talk here. How u know Iam still BN strong supporter!!! U not really read my views previously. U are not regular user of swk roads…so KEEP YOUR MOUTH CLOSED. U just used driving 1 time only. You still masih berhingus….just keep quiet. Your statement for DEMO will be recorded & authority will take further action to you!!! are u aware or not? You think I am primary school background only? I am one of swk social scientist majoring in political science from USM. So do not challenge with my view on politic if you have nothing…hahahaha